July 31, 2019 is the last date to file Income Tax returns for FY 2018-19.
All taxable entities and individuals must report their annual earnings before this specified due date, or they will have to face certain consequences, such as late fee penalties, interest on tax payable, and even prosecution.
Here is what can happen if you fail to meet the ITR filing deadline.
Penalties upto Rs. 10,000 might be levied
If you fail to file ITR after the July 31 deadline but do it before December 31, 2019, a penalty of Rs. 5,000 will be imposed.
If the filing is delayed even further, a penalty of Rs. 10,000 shall be charged.
However, for taxpayers whose income is not more than Rs. 5 lakh, the penalty is restricted to Rs. 1,000.
You will have to pay interest on tax payable
If you fail to file ITR by the July 31 deadline, you will have to pay interest on the eventual net tax payable, at the rate of 1% per month, upto the date of your actual ITR filing.
Notably, this interest amount is calculated on tax payable after deducting the TDS, TCS, advance tax and other relief/tax-credits given under the law.
You might also have to face prosecution
If you willfully do not file your ITR or don't pay your taxes even after receiving due notice under Sections 142 and 148, you may have to face prosecution under Section 276CC of the Income Tax Act.
Depending on the type and amount of income chargeable, the period of detention varies from 4 to 16 years.
Late ITR filing means lesser time for ITR revision
According to I-T Department rules, a one-year period is given for revising your tax returns for any errors made in the ITR filing.
Earlier, this period was two years.
This implies that the more you delay your ITR filing beyond deadline, the lesser time you shall have for revising your return and rectifying any errors you might make during the filing.
Delay in getting refund
Once you are done with the filing and verification of your ITR, the Central Processing Center of the I-T Department starts processing your return.
On this basis, tax liabilities or refunds as applicable are determined.
So, in case an individual is awaiting tax refund, late ITR filing will result in them having to wait even longer for the transfer of such refund.
#6: You won't be able to carry forward your losses
If you fail to file your ITR within the stipulated time period, you cannot carry forward the losses to get it adjusted against your profit and losses of future years.